Prepping for a Cryptocurrency World: China Edition


Over the past 12 months, the crypto currency market took a series of heavy punches from the Chinese government. The market took the strikes such as a warrior, however the combos have obtained its toll on many crypto currency investors. The market lack luster performance in 2018 excels in contrast with its leading thousand-percent profits in 20 17.

What has happened?

Since 2013, the Chinese government have taken cryptocurrency converter measures to regulate cryptocurrency, but nothing in comparison to that which has been enforced at 2017. (Read this post for a detailed analysis of this official notice issued by the Chinese authorities )

2017 was a banner year to the crypto currency market with all of the attention and growth it has achieved. The extreme price volatility driven the Central bank to adopt extreme measures, for example, ban of initial coin offerings (ICOs) and clampdowns on national crypto currency exchanges. Soon after, mining factories in China were made to shut, citing excess electricity consumption. Many factories and exchanges have moved overseas to prevent regulations but remained accessible to investors. Yet they still don’t escape the claws of the Chinese Dragon.

In the latest series of government-led efforts to track and prohibit crypto currency trading one of Chinese investors, China extended its”Eagle Eye” to monitor foreign cryptocurrency exchanges. Businesses and bank accounts suspected of performing transactions with foreign crypto-exchanges and related activities are subjected to measures from limiting withdrawal constraints to freezing of balances. There’ve even been ongoing rumors among the community of more extreme measures to be enforced on foreign associations that allow trading one of Chinese investors.

“in terms of if there’ll be regulatory measures, we will have to wait for orders from the higher authorities.” Excerpts from a meeting with group leader of this China’s Public Information Network Security Supervision service under the Ministry of Public Security, 28th February

Imagine your child investing his or her savings to invest at a digital product (in this case, crypto currency ) that he or she has no method of verifying its authenticity and value. They can get lucky and strike it rich, or discard it all if the crypto-bubble burst. Large-scale to millions of people and we are talking about countless Chinese Yuan.

The market is full of scams and moot ICOs. (I am positive you have heard news of individuals sending coins to random speeches with the assurance of doubling their investments and ICOs that only do not sound right ). Many unsavvy investors are in it for the cash also will care less about the tech and innovation behind it. The worth of many crypto currencies hails from market speculation. During the crypto-boom in 2017, engage in any ICO with either a renowned advisor on-board, a promising team along with an adequate hype and you are ensured at 3X your investments.

Too little understanding of this firm and the technology behind it, along with the proliferation of ICOs, is really a recipe for disaster. Members of the Central bank reports that nearly 90 percent of those ICOs are deceitful or involves illegal fundraising. I think, the Chinese government wants to ensure that crypto currency remains’controllable’ and never too large to fail within the Chinese community. China is taking the correct steps towards a milder, more regulated cryptocurrency universe, albeit competitive as well as more contentious. In reality, it might be that the ideal move the united states has taken in decades.

Can China issue an ultimatum and earn cryptocurrency prohibited? I highly doubt since it is very pointless to achieve this. Currently, financial institutions are prohibited from holding some crypto resources while individuals are permitted but are barred from undertaking any kinds of trading.

A State-run Cryptocurrency Exchange?

Wang Pengjie, an associate of the NPCC dabbled into the possibilities of a digital currency trading platform as well as initiate educational projects on blockchain and crypto currency in China. Nevertheless, the proposed platform would require a searchable accounts to permit trading.

“Together with the establishment of all related regulations and the cooperation of the People’s Bank of China (PBoC) along with China Securities Regulatory Commission(CSRC), a regulated and successful cryptocurrency exchange platform could serve as a official method for businesses to boost funds (through ICOs) and investors to put up their own digital assets and reach capital appreciation” Excerpts of Wang Pengjie presentation at the Two Sessions.

The March towards a Block Chain Nation

Governments and central banks worldwide have fought to grapple with the rising popularity of cryptocurrencies; however one thing is sure, all have adopted block chain.

Despite the cryptocurrency crack down, blockchain continues to be gaining popularity and adoption in numerous levels. The Chinese government are encouraging blockchain initiatives and embracing the tech. It is still unconfirmed if the digital currency is going to soon be decentralized and offer features of crypto currency like anonymity and immutability. It mightn’t come as a surprise if it ends up to be only a digital Chinese Yuan since anonymity would be the very last thing that China wants within their country. But created as a close replacement of this Chinese Yuan, the digital currency is going to be exposed to existing fiscal policies and policies.

People’s Bank of China Governor, Zhou Xiaochuan. Source: CNBC

“Lots of cryptocurrencies have seen explosive growth that may bring substantial unfavorable impact on retailers and retail investors. We do not enjoy (cryptocurrency) services and products which use the huge opportunity for speculation which gives people the illusion of getting rich over night” Excerpts from Zhou Xiaochuan interview on Friday, 9th March.

He also noticed that growth of this electronic currency is’technologically unavoidable’

On a regional level, many Chinese cities have are forcing block chain initiatives to promote growth in their place. Hangzhou, renown for being the headquarters of Alibaba, also have stated blockchain technology to become one of their city’s greatest priorities in 2018. The local government in Chengdu city have also been suggested that the building of an incubation facility to boost the adoption of block-chain technology while in the city’s financial solutions.

Local conglomerates such ten-cent and Alibaba also have formed partnership with blockchain initiated or firms projects by themselves.

All clues indicate the fact China is working towards a block chain nation. China has consistently had a open mentality to emergent technologies like mobile payment and Artificial Intelligence. Henceforth, it is with out doubt that China is going to be the first blockchain-enabled country. Will we begin to see the Chinese government capital and let its citizens trade ? Probably, when the market has improved and is less explosive but not at all in 2018.


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